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Thanks to uninsured drivers, Oklahoma loses $8.8 million a year in tax revenue

Wednesday, January 09, 2013 1:46:15 PM

John Egan

Uninsured motorists jack up car insurance premiums for those drivers who do buy policies. Now, one state has added up how much it’s losing because drivers fail to obtain even the minimum amount of state-mandated coverage.

A new study by the Oklahoma Insurance Department found the state is losing an average of more than $8.8 million a year in premium tax revenue from Oklahoma drivers who lack car insurance.

“When people break the law and don’t pay their fair share, it hurts all of us,” Oklahoma Insurance Commissioner John Doak says in a news release.

The state Insurance Department came up with the figure by using data from the Insurance Research Council, the U.S. Department of Transportation and the National Association of Insurance Commissioners.

Oklahoma has nearly 564,000 uninsured vehicles, according to state estimates. If owners of those vehicles paid the annual average of $700 for minimum liability coverage, the state would be collecting an additional $8.8 million or so each year from the state’s 2.25 percent tax on insurance premiums.

The Insurance Department says it’s working with state lawmakers to boost the fine for driving without insurance and to make it easier for cops to pull over motorists suspected of not having insurance.

The Insurance Research Council has estimated that 14 percent of drivers nationwide don’t have car insurance. In 2009, the council says, the five states with the highest estimated percentages of uninsured drivers were Mississippi (28 percent), New Mexico (26 percent), Tennessee (24 percent), Oklahoma (24 percent) and Florida (24 percent).

Replacing a 1991hondacivic with a 1991hondacivic could raise insurance rates by 50%.

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Calculator assumptions are based on a hypothetical driver with excellent credit, a bachelor’s degree, and no lapse in coverage who drives 15,000 miles per year, has state minimum policy limits, a $500 deductible on collision and comprehensive coverage and uninsured motorist coverage.

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See "Calculator Assumptions" for certain assumptions used in this calculation. Calculation based on historical data which may not predict future results. You should not rely solely on this tool to determine how much car insurance rates may go up or go down when insuring a different vehicle. There are numerous factors you should consider, including the terms of your insurance policy, the laws in your state, and your past driving record, among others. Your use of this tool is governed by insuranceQuotes' Privacy Policy and Terms of Use.

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